9911796707
TMI Blog2015 (6) TMI 237X X X X Extracts X X X X X X X X Extracts X X X X ..... upon the assessee on 01-10-2010 while the time limit has already expired on 30-09-2010." 2. Dismissing the ground "Rejecting the books of account by applying the provisions of Section 145 of the I.T. Act, 1961." 3. Estimating gross profit rate @ 7% (against the estimation of 8% by the ld. AO) instead of deleting the entire trading addition of Rs. 8,20,039/-." 2.1 During the course of hearing, the ld. AR of the assessee has not pressed the Ground No. 1. Therefore, the same is dismissed being not pressed. 3.1 Brief facts of the case are that the assessee is a civil contractor, proprietor of M/s. Raj & Co., Ranjeet Nagar, Bharatpur. The AO observed that as against the total contract receipts of Rs. 1,64,02,406/- assessee has declared 3% of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. The general observation made is regarding non-production of vouchers for which no details have been given. (v) The AO failed to appreciate that during the year the total receipts of the assessee has substantially increased from Rs. 75.28 lacs to Rs. 164.02 lacs in this year. 3.3 The assessee further submitted that:- The ld. AO further very arbitrarily ignored the assessment u/s 143(3) for the assessment year 2007-08 completed vide his order dated 18-11-209 (PB 8 to 12) at the total income of Rs. 8,32,962/- by no rejection of books of account of the assessee u/s 145 and making certain additions in the returned income of Rs. 1,92,970/- by disallowing contract exps. Of Rs. 2,50,000/-, Traveling and Conveyance Exps. Rs. 5,000/-, Telephon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ject to depreciation and interest by following observations. "5.3 I have gone through the assessment order as well as submissions made by the A.R. I find that the AO has rejected the book results and has applied the provisions of Section 145 of the Act for the following reasons:- (i) Day to day records of material consumed have not been maintained. (ii) Day to day records of payment made to labour has not been maintained. (iii) Complete bills/ vouchers in respect of expenses/purchases claimed in the return of income have not been produced for verification. (iv) Some of the expenses have been claimed on the basis of self made vouchers and have been made in cash. (v) Stock records were not maintained. The A.R. has submitted that the bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... result of which the gross profit rate has slightly decreased from 10.02% to 9.61%. I find that the AO has applied the rate of 8% after rejecting the book results, apparently in light of the provisions of Section 44AD of the Act which provides for computing the profits and gains of business of civil construction etc. @ 8% of gross receipts were the gross receipts do not exceed an amount of Rs. 40 lacs. In the section 44AD, it is also provided that subsection (1) shall not apply in case the gross receipt exceeds an amount of Rs. 40 lacs. In light of above discussion and considering that the appellant has disclosed net profit rate of 4.46% in A.Y. 2008-09 and net profit rate of 5.03% in A.Y. 2007-08, I consider it fair to estimate the net pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpenses incurred are being produced herewith for your kind verification." 3. Para 5 - "No stock register showing quality and quantitywise stock was kept by the assessee as the same is not possible keeping in view of the nature of business of the assessee and no such record is being maintained by any identical assessee." 4. Para 7 - "Complete books of account with supporting bills/vouchers are being produced herewith for your kind verification." It is contended that in preceding year against the net profit estimation by AO, the net profit rate of 4.89% was determined in first appeal by the ld. CIT(A) which has not been challenged by the Department. The books of account of the assessee were not rejected in assessment year 2007-08. It is pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hile allowing interest and depreciation from 7% estimated net profit; order of the ld. CIT(A) is relied on. 3.8 The ld. Counsel for the assessee in reply contends that the assessee has also filed the reply on 14-08-2012 to this remand report dated 16-07-2012 which is placed in the paper book filed by the assessee. 3.9 We have heard the rival contentions and perused the materials available on record. The ld. CIT(A) after considering the assessee's explanation and reply of the remand report, listed above five defects to be present in assessee's books of account which made the determination of proper taxable profits not possible in terms of sec. 145(3). In this contention, the ld. Counsel for the assessee could not effectively demons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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